Professional Tax is a Tax levied by the State on the income earned by way of profession, trade, calling or employment. Based on the salary or income levels, the tax is calculated and the same is deducted from the salary by the employers.

If this tax is not paid, the employer who has a certificate from the Government tax department is considered answerable.

As per the Professions, Trades, Callings and Employment Act 2000 passed by the government, professionals earning a particular monthly income or more are liable to pay professional tax. Professionals refer to people who are specialized professions like doctors; professionals in journalism, Information Technology, etc.

Every person doing any business or profession is liable to obtain a Certificate of Enrollment from the Profession Tax Authority. Once this certificate is obtained a person is liable to pay profession Tax.

An employer organization is required to get registered under the Profession Tax Act and obtain a Registration Certificate under which the payment in respect of taxes deducted from employees salaries can be made. Also as a firm, the organization is required to obtain Enrollment Certificate and pay Profession tax on it’s behalf.